Despite Setback, GOP Has Impressive Budgetary Wins

Monday, 21 Oct 2013 07:29 AM

 

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Democrats who gloat over Republicans' bad week in Congress might pause to recall that conservatives still own major victories from past budget showdowns. And these wins may again thwart Democrats' hopes of changing tax-and-spend policies in two-party talks beginning anew in the Capitol.

Chief among them is Republicans' unified stand against tax increases, even in the name of deficit reduction.

President Barack Obama wants more revenue from corporations and the wealthy for two goals: investing in areas such as education and infrastructure and enticing congressional Democrats to start curbing the growth of Social Security, Medicare and other "entitlement" programs.

Congressional Republicans' adamant stand against revenue hikes, perhaps more than any other factor, has shaped budget negotiations over the past three years. That's why Republicans have a stronger record than many might suspect, especially given their pell-mell retreat last week on the government shutdown and debt ceiling.

Editor's Note: What the Bible Says About Investing (Shocking)

Prodded by tea party activists who deplored deficit spending under Republican President George W. Bush, today's GOP lawmakers repeatedly call for budget cuts. By that measure, they've had a respectable run.

The mandatory spending cuts known as the "sequester," which emerged from earlier budget stalemates, will total about $1 trillion through 2021, unless changed. That's in addition to $1.5 trillion in spending cuts agreed to in 2011, in yet another debt-ceiling showdown.

To be sure, the GOP's anti-tax stand isn't bullet proof. Obama and Democratic lawmakers extracted $620 billion in tax hikes over 10 years in last December's "fiscal cliff" showdown.

Some liberals complain, however, that Obama could have — and should have — gotten more while he had the chance. Obama campaigned on raising income taxes on all couples earning more than $250,000. But he ultimately settled for a $450,000 cutoff. Aides said he thought Republicans would agree to other revenue hikes later.

Republicans instead chose to swallow the sequester cuts, even for programs they like. That's one reason discretionary spending — which excludes entitlements and accounts for about 40 percent of the federal budget — is projected to reach historic lows in the years ahead.

Anti-tax champions are crowing.

"Republicans have the high ground," said Grover Norquist, author of a "no new taxes" pledge reviled by many in Washington and signed by most Republicans in Congress.

In the upcoming round of bipartisan talks, he said, Democrats will have little leverage to seek new revenues.

Some Republicans say closing tax loopholes might generate a bit more revenue. But anything categorized as a "tax increase" is "a nonstarter," Norquist said, "because Republicans are not going to raise taxes."

Republicans weren't always so adamant about not raising taxes, and Democrats weren't always so resigned to that stand. Bush's big tax cuts in 2001 and 2003 were deeply controversial. Countless interest groups denounced them, and most Democrats and a few Senate Republicans opposed them.

Over time, however, Republicans strongly supported their full continuation, beyond their 10-year expiration date. And Democrats, including Obama, agreed to make permanent the Bush-era tax cuts for everyone except couples making more than $450,000.

Since Republicans took over the House in 2011, the combination of spending cuts and tax hikes is projected to reduce deficits by nearly $4 trillion over 10 years. The formula calls for about $1 in new revenue for every $4 in spending cuts, a ratio that dismays liberals.

The agreements have barely dented Social Security, Medicare and Medicaid. Officials say these automatically expanding programs will consume ever-larger portions of government spending if not modified.

Democrats, conceding they can't overcome the Republicans' no-new-taxes stand, suggest the renewed bipartisan talks are unlikely to yield significant changes to entitlement growth.

That's too bad, says Bruce Bartlett, a domestic policy aide to President Ronald Reagan and a Treasury official under President George H. W. Bush. "Small changes now would compound into meaningful dollars saved decades down the road," he said.

Bartlett said Obama and congressional Democrats could have pushed harder this month to reduce the sequester cuts, when Republicans recognized the growing public hostility toward the government shutdown and default threat.

Instead, Bartlett said, Democrats "kind of went in there saying 'Let's just keep the government going and raise the debt limit.'"

Editor's Note: What the Bible Says About Investing (Shocking)

Obama's 20-minute White House statement Thursday underscored the sensitivity of discussing tax increases. He called for "a balanced approach to a responsible budget," code for a mix of spending cuts and new revenues.

Aside from saying immigrants living here illegally should pay back taxes, the only time Obama mentioned taxes was when he advocated closing "corporate tax loopholes that don't help create jobs."

As for the just-ended congressional battle over the debt ceiling and government shutdown, the president said, "there are no winners here."


© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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